BELARUS NEWS AND ANALYSIS

DATE:

09/05/2008

A Partial Property Market in Belarus

by Sarah Brown

Is Europe's Last Dictator Bowing To Capitalism? After seeing next door neighbours Ukraine, Russia, Poland, Lithuania and Latvia enjoying the fruits of having attracted massive inflows of foreign investment, it seems Belarus president Alexander Lukashenko, wants in and is set to ease the heavy restrictions which have all but cut off foreign investment into this Eastern European country. However, the transition from closed market to just a partially open market will not be as smooth as in other former Eastern Block countries which may make investing in property in Belarus a hair-raising experience for speculative overseas property investors seeking to turn a quick profit.

Under current Belarus laws every property transaction above $236,000 has to be personally approved and signed off by the president and this bureaucratic process is bound to cause substantial delays for western companies and investors hoping to make a fast buck in this potentially lucrative market. Belarus is currently still in dispute with the US regarding spying allegations despite the president surprisingly giving US property experts Colliers International permission to open an real estate office in Minsk - this is probably a ploy to attract western investors to the region, who feel safer in the knowledge that there are western companies already operating in Belarus.

All property in Belarus is owned by the state and standard rental practice within the general population is to secure maximum 50 year leases on their properties. As to be expected in countries experiencing an economic growth spurt, there is something of a commercial real estate bubble in Belarus at present with prices rising by 25% to 30% a year and expected to do so for the foreseeable future. Quality property is in short supply and demand is running much higher than new property developments reaching completion, ensuring that a positive outlook at present.

Belarus will not be the easiest of property markets in which to operate but slowly we are seeing signs that the president's vice like grip is being weakened. There are hopes that once western companies and investors have a foothold in the country, they may then be able to encourage further relaxation in the regulations, but in the short term lets wait and see what becomes of the Belarus property market.

Source:

http://www.nubricks.com/archives/615/partial-property-market-belarus/#more-615

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